Parsons Construction Co. v. Metropolitan Utilities District

104 N.W.2d 272, 170 Neb. 709, 1960 Neb. LEXIS 112
CourtNebraska Supreme Court
DecidedJuly 8, 1960
Docket34756
StatusPublished
Cited by8 cases

This text of 104 N.W.2d 272 (Parsons Construction Co. v. Metropolitan Utilities District) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parsons Construction Co. v. Metropolitan Utilities District, 104 N.W.2d 272, 170 Neb. 709, 1960 Neb. LEXIS 112 (Neb. 1960).

Opinion

Messmore, J.

This is an action at law brought in the district court for Douglas County by Parsons Construction Company, a corporation, as plaintiff, against the Metropolitan Utilities District of Omaha, a municipal corporation, defendant, to recover an amount withheld by the defendant under a contract entered into between the plaintiff and defendant which provided for a stipulated sum as liquidated damages for delayed completion of the construction of an extension to an existing filter building at the district’s waterworks in Omaha. In addition, plaintiff sued for damages against the defendant claiming the defendant delayed completion of the contract by various acts and conduct on the part of the district’s officers, agents, engineers, and employees acting in an arbitrary and unreasonable manner in violation of the said contract.

At the close of all of the evidence the plaintiff moved that the trial court determine that the damages provided for in the contract between the parties be declared a penalty, and that such provisions be declared void and unenforceable. The defendant moved that the trial court determine that such damages as set forth in the contract between the parties were liquidated damages and not a penalty. The trial court overruled the plaintiff’s motion and sustained the defendant’s motion.

The plaintiff moved the trial court to determine that defendant was in default in the performance of the contract as a matter of law, and that for this reason the defendant was prevented from enforcing the provisions for stipulated damages contained in the contract. The trial court overruled this motion.

The defendant moved the trial court to determine, as a *711 matter of law, that the evidence was insufficient to justify a verdict for the plaintiff on the allegations of its petition or to sustain a judgment if such verdict were rendered, and that the petition be dismissed. The trial court sustained this motion and dismissed the plaintiff’s petition.

The plaintiff filed a motion for new trial. The trial court overruled the plaintiff’s motion for new trial. The plaintiff perfected appeal to this court.

For convenience we will refer to the parties as designated in the district court or, as occasion requires, to Parsons Construction Company as Parsons; to the Metropolitan Utilities District as district or utilities district; to Earl G. Hawkins, Sr., president of Parsons Construction Company, as Hawkins, Sr.; to Earl G. Hawkins, Jr., superintendent of Parsons Construction Company, as Hawkins, Jr.; to the resident engineers under the contract between the Metropolitan Utilities District, a municipal corporation, and Burns & McDonnell Engineering Company, by their last names or as resident engineer or engineers; to the principal engineer for Burns & McDonnell Engineering Company as Davis; to the general superintendent of the water operations for the Metropolitan Utilities District as. Detweiler; and to all other witnesses by their last names or titles.

The record shows that the consumption of water in Omaha was such that the water system was unable to meet the demands, due to the growth of the city. This required expansion of production of water, that is, more processing and pumping capacity was needed. The district entered into a contract with- Burns & McDonnell Engineering Company of Kansas City, Missouri, hereafter referred to as the engineering company, on May 27, 1954, to do resident engineering and inspection required in connection with the extension at its Florence waterworks. This contract provided in part that the engineering company make recommendations to the district, in writing, with respect to the need for resi *712 dent engineering and inspection service to be furnished by them, subject to approval by the general manager of the district. The contract further provided that resident engineers furnished under the contract by the engineering company should at all times be and remain the employees of the engineering company, and under no circumstances be considered employees of the district.

The district gave notice that it would receive bids for the extension of its waterworks and open the same on September 10, 1954. This contract was designated contract No. C-114. The contract provided that the contractor was to begin work within 15 calendar days, to complete all work necessary to enable the commencement of installation under contract No. E-110 within 173 calendar days, and to complete the entire contract within 265 calendar days from and after the date of due notification by the district of its approval and execution of the contract. The amount to be paid Parsons for the project was $471,712.

Article FC-31 of contract No. C-114, provided: “LIQUIDATED DAMAGES: It is mutually understood and agreed by and between the parties to this contract, in the execution of the same, that time is of the essence of the contract. In the event the Contractor shall fail to complete any portion of the work to be performed under this contract by and at the completion time bid in the Proposal, the Contractor shall pay unto the Utilities District as and for the liquidated damages, and not as a penalty, the sum of one hundred fifty dollars ($150.00) for each and every calendar day that the Contractor shall be in default; extensions of time granted by the Utilities District in accordance with the provisions of Article FC-19 shall not operate to the contrary, unless such extensions granted by the Utilities District specifically provide for the waiving of liquidated damages during and over such period of time extension.

“Liquidated damages will be waived for and during the extent of any delay which cannot be overcome by *713 reasonable acceleration of the approved work schedule, when such delay is caused by factors beyond the Contractor’s control, provided that adequate evidence is presented by the Contractor to prove such delay and to enable the Utilities District to determine with exactness the extent and duration of such delay for each item of material and equipment involved.

“The Utilities District shall have the right to deduct said liquidated damages from any moneys in its hands, otherwise due, or to become due, to said Contractor, or to sue for and recover compensation for damages for non-performance of this Contract at the time stipulated herein and provided for.”

There are certain established rules of law governing contracts such as contract No. C-114 in the instant case.

In the case of Stanford Motor Co. v. Westman, 151 Neb. 850, 39 N. W. 2d 841, this court held: “As a general rule, the question of whether a sum mentioned in a contract is to be considered as liquidated damages or as a penalty is a question of law, dependent on the construction of the contract by the court.” The court cited 15 Am. Jur., Damages, § 246, p. 678, as follows: “In such cases the court must find out whether the payment stipulated is in truth liquidated damages or a penalty. The question whether it is the one or the other is a question of law and one quite independent of the agreement of the parties to call it the one or the other.” The court further said: “We said in Gustin & Co. v. Nebraska Building & Investment Co., 110 Neb. 241, 193 N. W.

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Cite This Page — Counsel Stack

Bluebook (online)
104 N.W.2d 272, 170 Neb. 709, 1960 Neb. LEXIS 112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parsons-construction-co-v-metropolitan-utilities-district-neb-1960.